Claiming Your Expenses On A Property
Expenses can only be claimed for the period of time that a property is available for letting.
This situation can arise when the property is being used for non-income occupancy. Say you holiday in your beach property and you also let family and friends use the property.
The tax law says that you can only claim expenses for the pro rata time that the property is actually on the market for letting.
This needs to be understood because if you are regularly letting it to friends for a nominal fee to cover cleaning, it could quite severely affect the amount that you can claim for the property.
If you, your family or friends used it for 25% of the year that would mean that you can only claim 75% of the internet expenses, management fees, maintenance, insurance, depreciation and so on.
Keep careful records of this because if the tax department have any concerns they will want proof of what is happening re your bookings.
Filed Under: Tax Tips
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